The head of the federal Finance Department has shocked staff, telling them he will step down within a month.

David Tune emailed his employees at lunch-time on Friday, saying he will retire on June 27.

The career public servant has led the central department, which helps to control government spending, for almost five years.

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Finance was his first posting as a departmental secretary, but it is understood he told his minister, Mathias Cormann, months ago that he wanted to finished his career this year.

"Having been a public servant for over 38 years and having just turned 60, I have been thinking for a while that now is the right time, following another budget, to 'hang up the boots' and do something different with my life," Mr Tune told staff on Friday.

"Some of you will have heard me say on occasions that I am very proud to have been a public servant. What we do in the [Australian Public Service] really matters to the lives of the Australian people. The opportunities I have had to contribute to that over the years are ones that I will always cherish."

He said he and his wife had planned a long trip overseas, and he looked forward to being an "armchair observer over the coming years".